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What is House Bill H.R. 2064?

This bill would shorten the number of days before a “road show” that an emerging growth company (EGC) before its initial public offering date (IPO) that the company may publicly file a draft registration statement for confidential, nonpublic review by the Securities and Exchange Commission (SEC). The period would be shortened to 15 days, from the current 21 days.

A financial “road show” is typically a series of meetings held by top executives from the IPO-filing company across different cities in order to talk with current or potential investors.

There would be a grace period during which an issuer that was an EGC at the time that it filed its registration statement with the SEC but is no longer an EGC would continue to be treated that way for up to one year until the IPO is consummated.

The SEC would be directed to prescribe conditions under which a registration statement that is filed by an issuer before its IPO may omit financial disclosure information for historical periods that are otherwise required.

Impact

Companies considering, or in the process of, an IPO; the Securities and Exchange Commission.

Cost of House Bill H.R. 2064

A CBO cost estimate is unavailable.

More Information

In-Depth: This legislation was included in H.R. 37 which passed the House of Representatives in January 2015 on a vote 271 to 154, but it has not yet been advanced by the Senate Banking Committee.

As a standalone bill, the Improving Access to Capital for Emerging Growth Companies Act was passed by the House FInancial Services Committee on a unanimous vote of 57 to 0.

Of Note: An IPO is the first opportunity for the general public to purchase the stock (i.e a share of ownership) in a privately-owned company. The company usually hires an investment bank to assist with the process of determining the initial offering price, the amount of securities for sale, and assist in attracting investors to participate in the IPO. “Going public” through an IPO allows companies to obtain more capital, which in turn gives them the financial capacity they need to grow.

In recent years there have been several highly anticipated IPOs, with Facebook and Twitter both becoming publicly traded companies, while there are several other potential IPOs looming in the future, including Dropbox and Uber.

Media:

Summary by Eric Revell
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AKA

Improving Access to Capital for Emerging Growth Companies Act

Official Title

To amend certain provisions of the securities laws relating to the treatment of emerging growth companies.

bill Progress

Not enacted
The President has not signed this bill
The senate has not voted
The house Passed July 14th, 2015
Passed by Voice Vote
IntroducedApril 28th, 2015